In front of me as I write there sits a piece of Kosovo. It's a jagged lump, about three centimetres high, off-white with some glinting, yellowy metallic bits embedded in it. It was given to me by the late Ibrahim Rugova, long-time leader of the Albanian Kosovans' non-violent movement for independence and a passionate mineralogist. (Few visitors to Mr Rugova's house in Pristina escaped without a piece of Kosovo.) I also have before me my own photos of Kosovo's armed conflict, attempted genocide, liberation and international occupation in the last three years of Europe's bloody last century. The bombed, machine-gunned and looted villages, mosques and churches, fresh blood staining white snow, a dispossessed woodcutter called Selim Moriqi hawking cigarettes ("Monte Carlo") from a wheelbarrow, a victim's bare feet poking out of a body bag.

Kosovo is many things to many people. The cradle of Serbianness. The cradle of Albanianness. The lost heart of the Balkans. The place where Slobodan Milosevic began his ascent to infamy. The place where the west intervened to defend Muslims against Christians, atoning for its sins of omission in Bosnia. Another instance of western imperialism, according to Noam Chomsky. Nato's first shooting war. Tony Blair's finest hour - for it was the British prime minister who led the way in committing ground troops to reverse Milosevic's ethnic rout. ("Toni Bler ... thank you" says a Pristina graffito on another of my photos, alongside "God Save The Quin".) The location of some of the most beautiful monasteries on earth, now enduring as isolated Serbian Orthodox enclaves. Tell me your Kosovo and I will tell you who you are.

Whatever else it is or was, Kosovo is today a small but vital challenge to the international community in general and the EU in particular. Kosovo has been in limbo for more than seven years, since the Nato liberation/occupation was converted into a UN protectorate by security council resolution 1244. It can't go on like this. So Martti Ahtisaari, the UN secretary general's special envoy for the future of Kosovo, has come up with an impressive set of proposals for moving out of limbo. His plan may not actually use the word independence, but everyone understands that it would give Kosovo independence under strict international supervision. Kosovo would have its own flag, anthem, constitution, government, parliament and citizenship. It would be entitled to negotiate international agreements and join international organisations. However, this independence would be supervised and constrained by a so-called International Civilian Representative, backed up by an international military presence.

A large part of the Ahtisaari plan is devoted to securing the rights of the remaining Serb minority in Kosovo. Serb communities would have extraordinarily far-reaching autonomy, including the maintenance of financial ties with Belgrade and their own educational curricula, while their beautiful monasteries would be surrounded by special protection zones. It's a complicated, messy compromise, sure to leave everyone unhappy - which is the best one can hope for in the circumstances.

But some are more unhappy than others. Despite the recent "independence now" demonstration in Pristina, which left two more Kosovans dead, most mainstream Kosovan Albanian politicians think it's a reasonable deal. Serbian politicians say it's unacceptable. And Russia (choosing its words carefully) says it "will not support" the move to independence. After negotiations including the Serbs, now scheduled to start next week, Ahtisaari hopes to take a final version of his proposal to the UN security council in March. Although Vladimir Putin has recently been talking very tough, nobody knows which way Russia will go. Probably the Russians don't know themselves. Realists suggest that it may not be until the G8 summit in June that a deal is finally struck, opening the way to a UN security council resolution and then a four-month transition to qualified independence. If we don't clinch that deal, all bets are off. The Kosovans would be unlikely to take such a setback lying down. More violence would probably result.

The EU now needs to be clear, united, forceful and strategic - four things it usually fails to be beyond its own borders. Clear that this is the best solution we can get. Is it entirely just? Of course not. It is not just that innocent old Serbian women, whose only violent act has been to beat their cows with a stick, go in fear for their lives. But I shall never forget what Father Theodosius, a Serbian Orthodox priest in the lovely monastery of Decani, told me just after the liberation/occupation in the summer of 1999. It was, he said, Milosevic who "not only lost Kosovo, but completely destroyed his own people, physically and spiritually". The monk saw clearly: Milosevic, not the EU or the US, lost Kosovo for Serbia. And we should be clear, too, that a solution is needed now. Limbo is unsustainable.

United and forceful, because only thus will Russia be brought to agree. The current German presidency of both the EU and the G8 is the best chance we have to bring this about. If ever there was an issue which brings together European values (raped in Bosnia while the EU stood by) and European interests, it is Kosovo. Vital, all-European interests are at stake there, while no vital Russian interest is involved. We're not going to get a common European energy policy in the next four months, much though we need it, but here is one thing we could do right now.

And finally: strategic. In the long run, the only way the Ahtisaari plan is going to work is if both Serbia and Kosovo are brought into the European Union, along with their neighbours in the Balkans. Among member states of the EU, complex, multi-layered arrangements of shared and limited sovereignty are the norm. The way forward for Kosovo is not nation-building or even state-building, but member-state-building. And for Serbia too. This means European leaders having the courage and vision to say that we actually want a further enlargement of the EU, because only then will peace be secured in the Balkans and Europe be whole and free.

At the moment, no one in European politics dares to say this, although EU foreign ministers did make some encouraging noises to Serbia earlier this week. In fact, half of Europe is half-regretting the enlargements we've already made. But I will say it: in the big Balkan EU enlargement of 2014, Kosovo and Serbia join the EU as its 33rd and 34th members - or the other way round according to the Serbs. The other 2014 joiners are Montenegro, Bosnia and Albania. (Croatia and Macedonia slipped in a bit earlier and, in case you're wondering, Turkey joins in 2020.) As proposed a few years ago by a commission chaired by Giuliano Amato, on the 100th anniversary of the outbreak of the first world war, the Sarajevo summit of 2014 should celebrate this achievement. From Sarajevo to Sarajevo.

As it approaches its 50th birthday this March, the European economic community that became a union has an extraordinary story to tell about the spread of peace, freedom and the rule of law (see www.europeanstory.net). But a political narrative has to describe where we are heading as well as where we are coming from. The story is only as good as its next chapter. Kosovo should be part of it.